Bringing U.S. Roads into the 21st Century

A wide range of technologies and techniques are now available to vastly improve the performance of our transportation system, but we have been slow to adopt them.

Information technology (IT) has transformed many industries, from education to health care to government, and is now in the early stages of transforming countries’ transportation systems. Although many think that improving a country’s transportation network means solely building new roads or repairing aging infrastructure, the future of transportation lies not only in concrete and steel, but in the implementation of IT. IT enables assets throughout the transportation system—vehicles, buses, roads, traffic lights, message signs, and so forth—to become intelligent by embedding them with microchips or sensors and empowering them to communicate with each other through wireless technologies.

Doing so empowers actors in the transportation system—from commuters, to highway and transit network operators, to the actual devices themselves—with information (that is, intelligence) to make better-informed decisions, whether it is choosing which route to take, when to travel, whether to take a different type of transportation (for example, mass transit instead of driving), how to use traffic signals to allow the most efficient flow of vehicles possible, where to build new roads, or how to hold providers of transportation services accountable for results. This information can be used to maximize the performance of the transportation network and to move toward performance-based funding of transportation systems.

The power of intelligent transportation systems (ITS) to revolutionize transportation makes them an important factor contributing to countries’ economic competitiveness. The many advanced countries that have taken moderate to significant steps to deploy ITS include Australia, France, Germany, Japan, the Netherlands, New Zealand, Sweden, Singapore, South Korea, the United Kingdom, and the United States, with China rapidly catching up. Several of these countries have particular strengths in ITS, notably the real-time provision of traffic information in Japan and South Korea; congestion pricing in Sweden, the United Kingdom, and Singapore; vehicle-miles traveled systems in the Netherlands and Germany; electronic toll collection in Japan, Australia, and South Korea; and ITS in public transit in South Korea, Singapore, and France. Overall, Japan, South Korea, and Singapore stand out as world leaders in ITS deployment.

Although the United States has pockets of strength in ITS, at a national level it clearly lags the world leaders, just as it does in health IT, contactless mobile payments, digital signatures, and other emerging IT application areas. In all of these areas, the United States trails for a variety of reasons, including because it has lacked a comprehensive strategy, has underinvested, and has assumed that the private sector could develop and deploy these technologies by itself. In contrast, leading ITS countries have benefitted from strong government leadership, greater funding, and an ability to successfully forge public-private partnerships.

If the United States is to achieve even a minimal ITS system, the federal government will need to assume a far greater leadership role in not just ITS R&D, but also ITS deployment. It is time for the United States to view ITS as the 21st century digital equivalent of the interstate highway system of the 1950s and 1960s, in which the federal government took the lead in setting a vision, developing standards, laying out routes, and funding construction.

A wide range of benefits

ITS encompass a wide variety of technologies and applications that can be grouped into five categories:

  • advanced traveler information systems, which provide drivers with real-time travel and traffic information, such as transit routes and schedules, navigation directions, and information about delays due to congestion, accidents, weather, or road repairs;
  • advanced public transportation systems, which apply ITS to public transit, so buses or trains can report their position to inform passengers of their status in real time;
  • advanced transportation management systems, which include traffic control devices, such as traffic signals, ramp meters, dynamic (variable) message signs, and traffic operations centers;
  • ITS-enabled pricing systems, which help finance transportation through means such as electronic toll collection, congestion pricing, high-occupancy toll lanes, and vehicle miles traveled usage-based fee systems; and
  • cooperative vehicle-highway systems, such as vehicle-to-vehicle or vehicle-to-infrastructure integration, which enable connectivity and communication between vehicles and infrastructure such as roadside sensors or traffic lights, or to other vehicles.

ITS deliver five classes of benefits by increasing driver and pedestrian safety; improving the operational performance of the transportation network, particularly by reducing congestion; enhancing personal mobility and convenience; delivering environmental benefits; and boosting productivity and expanding economic and employment growth.

ITS can help reduce the 1.2 million fatalities that occur annually on the world’s roads, including the 5.8 million crashes and 37,621 fatalities in the United States in 2008. Widespread use of electronic toll collection could largely eliminate the 30% of highway crashes that occur in the vicinity of toll collection booths. Highway ramp metering has been shown to reduce total crashes by at least 15%. If IntelliDrive, the U. S. vision for a nationwide cooperative vehicle-highway system, were deployed, it could address 82% of vehicle crash scenarios involving unimpaired drivers. Deploying ITS could thus help mitigate the $230-billion annual economic impact, equivalent to nearly 2.3% of U.S. gross domestic product, of traffic accidents and associated injuries or loss of life.

ITS improve the performance of transportation networks by maximizing the capacity of existing infrastructure, reducing the need to build additional highway capacity. For example, applying real-time traffic data to U.S. traffic signal lights can improve traffic flow significantly, reducing stops by as much as 40%, reducing travel time by 25%, cutting gas consumption by 10%, and cutting emissions by 22%. ITS can contribute significantly to reducing congestion, which in the United States costs commuters 4.2 billion hours (a full work week per driver) and 2.8 billion gallons of fuel each year, costing the U.S. economy up to $200 billion annually. One study found that traffic jams could be reduced as much as 20% by 2011 in areas that use ITS. Other studies have found that region-wide congestion pricing could reduce peak travel volume by 8 to 20%, and that if congestion pricing was implemented on the nation’s interstates and other freeways, vehicle miles traveled would be reduced by 11 to 19%.

By improving the performance of the transportation network, ITS deliver environmental benefits, enhance driver mobility and convenience, and even boost productivity and economic growth. For Japan, ITS have been crucial as it strives to meet its goal of reducing CO2 emissions by 2010 to 31 million tons below 2001 levels, with 9 million tons of reduction coming from more fuel efficient vehicles, 11 million tons from improved traffic flow, and 11 million tons from more effective use of vehicles, the latter two a direct benefit of the country’s ITS investments. Not only does reduced congestion enhance driver mobility, it ensures that businesses can rely on the transportation network to support just-in-time supply chains. For many countries, ITS is a rapidly expanding, export-led growth sector that contributes to national competitiveness and employment growth. The U.S. Department of Transportation (DOT) has estimated that the ITS field could create almost 600,000 new jobs over the next 20 years, and a study of ITS in the United Kingdom found that a $7.2-billion investment would create or retain 188,500 jobs for one year.

ITS deliver superior benefit-cost returns when compared to traditional investments in highway capacity. Overall, the benefit-cost ratio of systems-operations measures enabled by ITS has been estimated at about 9 to 1, far above the addition of conventional highway capacity, which has a benefit-cost ratio of 2.7 to 1. The benefits of traffic signal optimization alone outweigh costs by 38 to 1. A 2005 study of a model ITS deployment in Tucson, Arizona, consisting of 35 technologies that would cost $72 million to implement, estimated that the average annual benefits to mobility, the environment, and safety totaled $455 million annually, a 6.3 to 1 benefit-cost ratio. According to the U.S. Government Accountability Office (GAO), the present value cost of establishing and operating a national real-time traffic information system in the United States would be $1.2 billion but would deliver present value benefits of $30.2 billion, a 25 to 1 benefit-cost ratio.

Challenges to deploying ITS

Despite their technical feasibility and significant benefit-cost returns, many nations underinvest in ITS because there are a significant number of challenges involved in developing and deploying them, including system interdependency, network effect, and scale as well as funding, political, and institutional challenges. Whereas some ITS, such as ramp meters or adaptive traffic signals, can be effectively deployed locally, the vast majority of ITS applications—and certainly the ones positioned to deliver the most extensive benefits to the transportation network—must operate at scale, often at a national level, and must involve adoption by the overall system and by individual users simultaneously, raising complex system coordination challenges. For example, systems like IntelliDrive in the United States must work on a national basis to be effective. It does a driver little good to purchase an IntelliDrive-equipped vehicle in one state if it doesn’t work in another. Likewise, drivers are not likely to demand on-board telematics units capable of processing real-time traffic information if that information is unavailable from government or private sector providers. It makes little sense for states to independently develop a vehicle miles traveled usage-fee system because, in addition to requiring a device on vehicles, VMT requires a satellite and back-end payment system, and it makes little sense for states to independently replicate these infrastructure investments.

Apart from generally being underfunded, another challenge for ITS projects is that they often have to compete for funding with conventional transportation projects that may be more immediately pressing but don’t deliver as great long-term returns. Unfortunately, as one GAO study found, in many cases, “information on ITS benefits does not have a decisive impact on the final investment decisions made by state and local officials.” And although many state transportation departments have in-depth expertise in conventional transportation technology, such as pavement and bridges, they often lack either knowledge or interest in ITS, and therefore centralizing that knowledge in one location at the federal level may be more effective.

Although deploying ITS raises a number of challenges, none of them are insurmountable, and a number of countries have overcome them. Japan, South Korea, and Singapore, in particular, stand out.

Japan leads the world in ITS based on the importance ascribed to ITS at the highest levels of government, the number of citizens benefitting from use of an impressive range of deployed ITS applications, and the maturity of those applications. Japan clearly leads the world in traveler information systems. Its Vehicle Information and Communication Systems (VICS) program delivers up-to-the minute, in-vehicle traffic information to drivers through an on-board telematics unit, and has been available nationwide since 2003. Japan’s Smartway system is capable of marrying knowledge of a vehicle’s precise position with location-specific, real-time traffic information, enabling it, for example, to warn a driver via voice instruction, “You are coming up to a blind curve with congestion backed up behind it, slow down immediately.” Smartway also provides visual information of road conditions ahead, via live camera images of tunnels, bridges, or other frequently congested areas. Impressively, Smartway evolved extremely fast, from a concept in 2004, to limited deployment in 2007, to national deployment in 2010. At least 34 million vehicles have access to real-time, in-vehicle traffic information in Japan.

Japanese citizens can use the Internet or their mobile phones to access comprehensive real-time traffic information about almost all highways in the country through an integrated road traffic information provision system. The Web site features maps that display a broad range of traffic information, including warnings about traffic restrictions, congestion data, weather conditions on roads, and repair activity. Japan has also focused on providing real-time traffic information during natural disasters and has designed mechanisms to automatically feed data about such events into Smartway and VICS.

Japan is also a world leader in electronic toll collection, with 25 million vehicles (about 68% of all vehicles regularly using Japan’s toll expressways) equipped with on-board toll-collection units. Japan operates a single national standard for electronic toll collecting, thus ensuring nationwide system compatibility. In short, drivers can go anywhere in the country with only one tag, unlike the United States, where multiple tags are needed. In designing its electronic toll collection technical architecture, Japan adopted an active method for two-way communication based on the 5.8GHz-band system, which enables roadside and on-board units to interact with each other, instead of a passive method, in which the electronic tag on the vehicle reacts only when “pinged” with a signal from a roadside toll collector device. This design decision has been crucial in expanding electronic toll collection so that private companies, such as parking garages or gas stations, can offer electronic payment options. Japan also regularly uses variable pricing, easy to implement electronically, so that prices can be changed to reflect traffic conditions and thus manage congestion.

South Korea’s strengths in real-time traffic information provision, advanced public transportation systems, and electronic toll collection make it a world leader in ITS. Busan, South Korea, will host the 2010 ITS World Congress, which will show off Busan as 1 of 29 South Korean cities with comprehensively deployed ITS infrastructure.

South Korea’s Expressway Traffic Management System collects real-time traffic information and transmits it to the country’s National Transport Information Center (NTIC) via a high-speed optical telecommunication network deployed specifically to support the country’s ITS infrastructure. Collected and processed traffic information is provided to South Korean citizens free of charge through various channels, including variable messaging signs, the Internet, and broadcasting. The NTIC Web site offers an interactive graphic map that citizens can access to see a consolidated view of traffic status on the country’s roads. Real-time traffic information is available not only on expressways but also on national and urban district roads. Almost one-third of all vehicles in South Korea use onboard vehicle navigation systems.

Public transportation information systems, particularly for buses, are highly deployed in South Korea. Seoul alone has 9,300 on-bus units equipped with wireless modems and GPS position detectors. About 300 bus stops communicate with Seoul’s central traffic operations management center via wireless communications to provide an integrated, up-to-the second view of Seoul’s bus transportation network. The service includes bus arrival time, current bus location, and system statistics. Bus stop terminals are equipped with liquid crystal display message screens to alert riders of bus status and schedules. South Koreans regularly use the location-based tracking feature in their GPS-enabled phones to access a Web site that presents a list of available public transportation options; the system recognizes where the passenger is located and provides walking directions to the nearest option.

South Korea’s Hi-Pass electronic toll collection system covers 260 toll plazas and more than 3,200 kilometers of highway. Five million South Korean vehicles use Hi-Pass, which has a highway utilization rate of more than 30%. Hi-Pass covered 50% of highways in 2009, will cover 70% by 2013, and be available nationwide thereafter. South Koreans can also use their Hi-Pass card for paying for parking and buying gas and other products.

Singapore collects real-time traffic information from a fleet of 5,000 taxis acting as vehicle probes. Data including speed and location are fed back to an operations management center, where an accurate picture of traffic flow and road congestion is generated. Singapore disseminates traffic information via its Expressway Monitoring and Advisory System, comprised in part of variable message signs placed strategically along expressways. In April 2008, Singapore launched a nationwide system consisting of roadside variable messaging signs, which alert drivers to the availability of parking spaces at various locations.

Singapore, which has had some form of congestion pricing in place in its city center since 1975, is a world leader in electronic road pricing. In 1998, Singapore implemented a fully automated system with an in-car unit that accepts a prepaid smartcard called the Cashcard. The system has since been expanded beyond Singapore’s downtown restricted zone to its highways and arterial roads. Singapore’s scheme uses traffic speeds as a proxy for congestion. Rates are raised or lowered to achieve traffic optimization along a speed-flow curve, 45 to 65 kmph for expressways and 20 to 30 kmph for arterial roads. In effect, the system uses market signals to manage supply and demand on Singapore’s roads. Singapore is currently evaluating moving to a next generation system that would use satellite-based GPS technology to make distance-based congestion charging possible. The government estimates that the economic benefit of time savings due to shorter delays on expressways, largely achieved through use of congestion charging, amounts to more than $40 million annually.

Singapore made public transportation a more attractive option for commuters by installing real-time bus arrival panels in January 2008 at almost all bus stops throughout the country. Another service, launched in July 2008, advises commuters on optimal public transport travel routes from origin to destination.

The United States lags behind

The United States lags world leaders in aggregate ITS deployment, particularly the provision of real-time traffic information by transportation agencies, progress on cooperative vehicle-highway integration, adoption of computerized traffic signals, and maximizing the effectiveness of already fielded ITS systems. Although the United States certainly has pockets of strength in ITS in particular regions or applications—including use of variable rate highway tolling, electronic toll collection, certain advanced traffic management systems such as ramp metering, and an active private sector market in telematics and travel information provision—overall the implementation of ITS in the United States varies immensely by state and region, thus tending to be sporadic, isolated, and not connected into a nationally integrated system.

Regarding the collection of real-time traffic information, a 2009 GAO report found that the technologies used by state and local agencies to do so covered only 39% of the combined freeway miles in 64 metropolitan areas providing information. This is a significant gap, given that urban freeways account for the majority of the nation’s traffic, congestion, and travel time variability. The picture was not much better for the dissemination of real-time travel information. In 2007, according to the GAO, 36% of the 94 data-providing U.S. metropolitan areas provided real-time highway travel time, and 32% provided travel speed information. For arterial roadways, only 16% of the 102 data-providing metropolitan areas disseminated real-time travel speed information and only 19% distributed travel time data. The United States does better at distributing incident information in real time, with 87% of metropolitan areas providing real-time information about incidents on freeways and 68% sharing incident information on arterial roads.

The United States has room for improvement in maximizing the value of already deployed ITS systems and taking advantage of readily available and implementable ITS applications, such as adaptive traffic signal lights. For example, in 2007, the National Transportation Operations Coalition, an alliance of national associations, practitioners, and private sector groups representing the interests of the transportation industry at the state, regional, and local levels, gave the United States a “D” grade because the vast majority of signalized intersections were using static, outdated timing plans based on data collected years or decades before. The San Francisco Bay area had 4,700 traffic sensing detectors along its 2,800 freeway miles in 2003, with 29% of the roads incorporating sensors spaced every mile, and 40% with sensors spaced every two miles. However, about 45% of the devices were out of service, significantly reducing the system’s ability to produce reliable traffic data. The GAO’s 2009 report reiterated that many of the problems pertaining to inadequate funding for the operation of already fielded ITS have not improved appreciably since 2003.

For the most part, these problems have resulted from continued inadequate funding for ITS and the lack of the right organizational system to drive ITS in the United States, especially the weak federal role. The U.S. ITS effort focuses on research, is funded at $110 million annually, and operates out of the DOT’s Research and Innovative Technology Administration’s (RITA’s) ITS Joint Program Office. To reorganize and reanimate the U.S. ITS effort, on January 8, 2010, RITA unveiled a five-year ITS Strategic Research Plan, 2010-2014, that will make an assessment of the feasibility, viability, and value of deploying IntelliDrive. Although the strategic plan represents an important step forward, the United States needs to make a fundamental transition from a mostly research-oriented approach to a focus on deployment and to accelerate the speed at which ITS technologies reach the traveling public. But the pace of progress is slow. Whereas Japan took just six years to move from conceptualization to deployment of its cooperative-vehicle highway system, Smartway, it will take the United States five years simply to research and to make determinations about the feasibility and value of IntelliDrive.

The United States has every bit the technological capability that Japan, South Korea, and Singapore possess in ITS, and actually held an early lead in ITS in the 1990s, with the advent of GPS technology and first-generation telematics systems. In fact, many ITS technologies were initially developed in the United States but found quicker and greater deployment elsewhere. But institutional, organizational, policy, and political hurdles in the United States have allowed other countries to take the lead.

The need for a national commitment

Policy factors are centrally important in explaining international ITS leadership. Overall, countries leading the world demonstrate, first, a national-level commitment and vision, giving the government a strong leadership role, and second, make substantial investments in ITS deployment.

A major reason why Japan, South Korea, and Singapore lead is because they view ITS as one of a suite of IT applications or infrastructures that will transform their societies and drive economic growth. As such, they have focused on establishing policies for digital transformation generally and ITS transformation specifically, and made both national priorities. As an ABI Research report noted, “Japan and South Korea lead the world in ITS, and national government agendas are among the most significant drivers for the development of ITS [there].” In contrast, there has been no national vision for IT transformation in the United States. To the extent that it gets attention and funding, ITS has been seen simply as an adjunct tool that might make transportation marginally better.

Japan’s 2001 eJapan Strategy, which sought to transform the country into one of the most advanced IT nations within five years, explicitly recognized the importance of public transport systems that rely on advanced information communications technologies. In June 2007, Japan announced a long-term strategic vision, called Innovation 25, which set the following goal: “By 2025, ITS will have been constructed that integrate vehicles, pedestrians, roads, and communities; and that have made traffic smoother, eliminated traffic congestion, and almost entirely eliminated all traffic accident fatalities. Smoother traffic will mean lower CO2 emissions and logistics costs.” Japan wants to reduce traffic fatalities below 5,000 by 2012 and eliminate them altogether by 2025.

South Korea’s government has also acknowledged the power of IT to drive economic growth and improve citizens’ quality of life, and has recognized the impact IT can have in improving the country’s transportation system. In 2004, South Korea announced a strategy that identified key IT areas, including ITS, where the country would seek world leadership. Beyond its strategic IT plan, South Korea also created a national ITS master plan. Likewise, Singapore has both a national IT strategy and an ITS master plan.

The leading countries invest heavily in ITS. South Korea has pledged a $3.2-billion investment, an average of about $230 million annually, from 2007 to 2020. Japan invested approximately $645 million in ITS from April 2007 to March 2008 and $664 million in ITS from April 2008 to March 2009. Aggregate ITS spending at all government levels in the United States in 2006 was approximately $1 billion, most of it spent at the state level. As a percentage of GDP, South Korea and Japan each invest more than twice as much in ITS as does the United States.

Accelerating deployment

Compared to other countries that recognize the key role of government in assisting their countries through IT-enabled economic transformation, the United States has largely believed, incorrectly, that this is something the private sector can do on its own. To the extent the United States has developed an ITS plan, it is not connected to a national IT strategy, is relatively late in coming, cautious in its goals, and not yet a plan for national ITS deployment.

Since the interstate highway system was for the most part completed, the surface transportation policy community has collectively struggled with defining the appropriate role of the federal government in the nation’s surface transportation system. In the 21st century digital economy, one key role for the federal government should be to take responsibility for the development and implementation of a world-class ITS system across the United States. Just as building the interstate system did not mean an abandonment of the state role, neither does this new role. But just as the building of the interstate system required strong and sustained federal leadership, so too does the transformation of our nation’s surface transportation system through ITS.

Policy action is urgently needed if the United States is to reposition itself as one of the world’s ITS leaders. To get there, Congress should take these steps:

  • Significantly increase funding for ITS at the federal level, by $2.5 to $3 billion annually, including funding for large-scale demonstration projects, deployment, and the operations and maintenance of already deployed ITS systems. Specifically, the next surface transportation authorization bill should include at least $1.5 billion annually in funding for the deployment of large-scale ITS demonstration projects. The authorization should also provide dedicated, performance-based funding of $1 billion for states to implement current ITS systems and provide for operations, maintenance, and training for already deployed ITS systems at the state and regional levels.

    The call for at least $1 billion in federal funding to support operations of already deployed or readily deployable ITS comes closer to matching the amount ITS leaders such as Japan spend on a per-capita basis and would go a long way towards alleviating the problems documented here of citizens not realizing the full benefits of already deployed ITS due to insufficient funding. Moreover, the recommendation is in line with recommendations from both the American Association of State Highway and Transportation Officials and ITS-America (a public-private organization promoting ITS) to spend at least $1 billion annually to support deployment of ITS technologies and intermodal integration.

  • Expand the mandate of the DOT’s ITS office to move beyond R&D to include deployment.
  • Tie federal surface transportation funding to states’ actual improvements in transportation system performance. Currently, the funding allocations for the major transportation programs are largely based on formulas reflecting factors such as state lane miles and amount of vehicle miles traveled. As a result, although there is substantial process-based accountability for how federal funds are used, there is woefully little attention paid to results. Performance measurement, evaluation, and benchmarking are notably absent from surface transportation funding. Transportation agencies at all levels of government face virtually no accountability for results. Holding states accountable for real results will allow federal and state transportation funds to go farther, achieving better results for the same amount of funding. It will also provide stronger incentives for states to adopt innovative approaches to managing highways, including implementing ITS.
  • Charge the DOT with developing, by 2014, a national real-time traffic (traveler) information system, particularly in the top 100 metropolitan areas, with this vision including the significant use of probe vehicles. Quickly focusing on ensuring the availability of real-time traffic information to U.S. motorists is warranted because the technology to do so is readily available, would benefit large numbers of drivers, and as the GAO reported, the $1.2-billion expenditure would result in total cost savings of $30.2 billion due to benefits including enhanced driver mobility, reduced environmental impact, and increased safety.
  • Authorize a comprehensive R&D agenda, including investments in basic research, technology development, and pilot programs, to begin moving the United States to a mileage-based user fee system by 2020. As documented in the National Surface Transportation Infrastructure Financing Commission’s 2009 report Paying Our Way, the current federal transportation funding structure that relies primarily on taxes imposed on petroleum-derived vehicle fuels is not sustainable over the long term. Moving toward a funding system based more directly on miles driven (and potentially other factors, such as time of day, type of road, and vehicle weight and fuel economy) rather than indirectly on fuel consumed, is “the most viable approach” to ensuring the long-term sustainability and solvency of the Highway Trust Fund.

Recommended Reading

  • Sam Staley and Adrian Moore, Mobility First (Lanham, Maryland: Rowman & Littlefield Publishers, Inc.: 2009).
  • National Surface Transportation Infrastructure Financing Commission, “Paying Our Way: A New Framework for Transportation Finance,” February 2009,
  • Japan Highway Industry Development Organization, “ITS Handbook Japan 2007-2008.”
  • U.S. Government Accountability Office (GAO), “Surface Transportation: Efforts to Address Highway Congestion through Real-Time Traffic Information Systems Are Expanding but Face Implementation Challenges,” GAO-10-121R, November 2009, 4,
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Cite this Article

Ezell, Stephen. “Bringing U.S. Roads into the 21st Century.” Issues in Science and Technology 26, no. 4 (Summer 2010).

Vol. XXVI, No. 4, Summer 2010